NUMBER 13-17-00627-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG 

 

CARLOS PASOL AND REE

FAMILY LTD PARTNERSHIP, Appellants,

v.

D&C JEWELRY SHOP, INC., Appellee.

 

On appeal from the 444th District Court

of Cameron County, Texas.

 

MEMORANDUM OPINION

Before Chief Justice Contreras and Justices Rodriguez and Benavides1

Memorandum Opinion by Justice Benavides

By five issues, appellants Carlos Pasol2 and REE Family Limited Partnership 

 

1

 The Honorable Nelda V. Rodriguez, former Justice of this Court, did not participate in this 

decision because her term of office expired on December 31, 2018.

2

 During the pendency of this appeal, Jovita Pasol, Carlos Pasol’s wife, notified this Court of 

Carlos Pasol’s passing in May 2018. He remains a party to the appeal. See TEX. R. APP. P. 7.1(a)(1). 
2

(collectively Pasol) challenge the jury verdict in favor of appellee D&C Jewelry Shop, Inc.

(Ayala). 3 Ayala sued Pasol for common law fraud, statutory fraud, negligent 

misrepresentation, partial performance, promissory estoppel, and quantum meruit. The 

jury awarded Ayala $235,438 in damages, the exact out-of-pocket amount Ayala claimed. 

On appeal, Pasol alleges that (1) the statute of frauds precludes the enforceability 

of an oral promise relating to the sale of real estate unless equitable exceptions are made; 

(2) the parol evidence rule precludes the admission of prior or contemporaneous collateral 

agreements or negotiations that change the terms of a final agreement unless an 

exception is met; (3) the evidence was legally and factually insufficient to prove common 

law fraud, statutory fraud, negligent misrepresentation, and promissory estoppel; (4) 

Ayala is not entitled to recovery of damages because he failed on his causes of action; 

and (5) the finding of quantum meruit was not applicable and should be reversed. We 

affirm.

I. BACKGROUND

Pasol was in the business of financing loans on property for individuals. Pasol 

and Ayala had conducted multiple transactions in the past where Pasol would finance a 

property that Ayala wanted to purchase for ten percent down, a trust lien against the 

property, and monthly payments at an interest rate of around 8%. Ayala testified that 

most of the terms were verbally negotiated and then memorialized in writing.

 

3

 Domingo Ayala is the president and owner of D&C Jewelry Shop, Inc. Although D&C Jewelry 

Shop, Inc. was listed as the plaintiff in the underlying action, we will refer to D&C Jewelry Shop, Inc. by 

Ayala’s last name for ease of reference. 
3

A. Executed Land Contract

Although the specific facts of what transpired are disputed between the parties, at 

some time during 2012, Ayala and Pasol discussed the purchase of a tract of land Pasol 

owned off Paredes Line Road between Brownsville and Los Fresnos. According to 

Ayala, at some point in early 2013, Pasol showed him a plat which depicted improvements 

to the property that allowed the land to operate as a flea market. The original plot of land 

Pasol owned was sixty acres, but Ayala was interested in purchasing a smaller portion 

(around fifteen and a half acres). Ayala alleged that Pasol represented to him that the 

property was a functioning flea market, had a certificate of occupancy from the county, 

was in compliance with water and sewer requirements, and was available for immediate 

use. Ayala claimed that Pasol told him that the flea market was in operation under the 

name “Sapito Market.” Ayala also alleged that he and Pasol together calculated potential 

gross income from the flea market and wrote those calculations on the plat. Pasol told 

Ayala to visit the land first and then they would discuss pricing and terms. Ayala testified 

that based on the verbal representations and negotiations, he agreed to purchase the 

land. 

At some point before mid-February 2013, Pasol and Ayala agreed to the terms 

which were: (1) the sale was owner-financed; (2) the sale price was $600,000; (3) the 

term was for twenty-five years at an interest rate of 6.5%; (4) Ayala would purchase under 

D&C Jewelry, Pasol would convey to REE, and REE would be the seller; and (5) Ayala’s 

first payment of $4,189.18 would not be due until September 2013, although interest 

would accrue during that time. On February 14, 2013, Ayala and Pasol’s wife executed 
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the purchase documents at a law office, which included: (1) a warranty deed with 

vendor’s lien, (2) a deed of trust, (3) a real estate lien note, (4) a closing statement, and 

(5) an acknowledgment regarding attorney representation disclosure. The deed of trust 

included the metes and bounds description of the property and Ayala was provided with 

a settlement statement and survey of the property. 

B. Ayala’s Reliance on Pasol’s Statements

Two months after the purchase, Ayala discovered the property did not have a 

certificate of occupancy from the county. According to Ayala, Pasol had been unable to 

locate the certificate of occupancy upon request prior to Ayala’s discovery at the county 

office. Later, nearly five months after the purchase, Ayala also discovered the property 

did not have potable water or a proper septic system. Ayala admitted during trial that 

prior to purchasing the property, he drove by one time, but never inspected it further.

Ayala stated that he went to Pasol after his discoveries and Pasol told him to “open

[the flea market] anyway.” When Ayala refused, Ayala claimed that Pasol told him to 

continue with the required improvements and Pasol would either reimburse Ayala for the 

expenses or deduct that amount from the loan on the property. Pasol disputed this 

conversation occurred. Ayala continued making improvements, presenting invoices at 

trial from Zarsky Lumber, Godel Construction, G & T Paving, Peralez Construction, and 

Montemayor Engineering. Ayala also presented testimony from a laborer on his project. 

As the work projects progressed, Ayala ran out of money and had to sell some of his other 

properties. 
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Ayala obtained his certificate of occupancy on April 25, 2014. Ayala testified he 

then approached Pasol and requested reimbursement and modification of the terms of 

the note between them, but no agreement materialized. 

On July 31, 2014, Pasol mailed Ayala a registered letter requesting payment on 

the property. No payments were made. On August 19, 2014, Pasol made a demand 

for payment and notice of intention to accelerate the note. Again, no payments were 

made by Ayala. Ayala claimed that following the August letter, he went to speak with 

Pasol to “confront” him about their previous agreement to reimburse for expenses. Ayala 

stated that Pasol again agreed to reimburse him for his expenses. On October 22, 2014, 

Pasol delivered a notice of acceleration and notice of foreclosure.

C. Lawsuit 

In November 2014, Ayala filed an application for a temporary restraining order and 

injunction to prevent the foreclosure sale. In March 2015, the trial court entered an 

agreed temporary injunction requiring Ayala to make monthly payments, show proof of 

payment for 2014 ad valorem taxes and insurance on the property, and ordering Pasol to 

hold off on any foreclosure sale. Ayala did not provide proof of payment of the 2014 

taxes and a tax suit was filed on the property. 

Later, Ayala made six payments of $4,189.18 on the note and Pasol paid $36,000 

in taxes. The parties agreed to dissolve the agreed temporary injunction. Pasol 

foreclosed on the property on June 7, 2016.

At trial on Ayala’s third amended petition, seventeen questions were submitted to 

the jury. The jury found for Ayala on all of the issues related to common law fraud, 
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statutory fraud, negligent misrepresentation, partial performance, promissory estoppel, 

and quantum meruit. The jury awarded Ayala a lump sum amount of $235,438 in 

damages, the exact out-of-pocket amount Ayala provided proof for. The jury also found 

the harm caused to Ayala by Pasol was occasioned by fraud and malice but awarded no 

exemplary damages. Pasol filed a motion for new trial, which was denied. This appeal 

followed. 

II. LEGAL AND FACTUAL SUFFICIENCY

By his third issue, which we address first, Pasol challenges the legal and factual 

sufficiency of the jury’s findings regarding common law fraud, statutory fraud, negligent 

misrepresentation, and promissory estoppel. 

A. Standard of Review

When an appellant, such as Pasol, attacks the legal sufficiency of an adverse 

finding on an issue for which it did not have the burden of proof, the appellant must 

demonstrate that there is no evidence to support the adverse finding. Editorial 

Caballero, S.A. de C.V. v. Playboy Enters., Inc., 359 S.W.3d 318, 328 (Tex. App.—

Corpus Christi 2012, pet. denied) (citing City of Keller v. Wilson, 168 S.W.3d 802, 810 

(Tex. 2005)); Total E& P USA, Inc. v Mo-Vac Serv. Co., No. 13-15-00348-CV, 2017 WL 

3184655, *5 (Tex. App.—Corpus Christi July 27, 2017, pet. denied) (mem. op.). Such a 

no-evidence challenge will be sustained only if: (1) there is a complete absence of 

evidence of a vital fact; (2) the court is barred by rules of law or of evidence from giving 

weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove 

a vital fact is no more than a mere scintilla; or (4) the evidence establishes conclusively 
7

the opposite of a vital fact. City of Keller, 168 S.W.3d at 810. In conducting a legal 

sufficiency review, we review the evidence presented at trial in the light most favorable to 

the jury’s verdict and indulge every reasonable inference that would support it, crediting 

favorable evidence if reasonable jurors could and disregarding contrary evidence unless 

reasonable jurors could not. Editorial Caballero, 359 S.W.3d at 329.

In reviewing a factual-sufficiency challenge to a jury finding on an issue on which 

the appellant, such as Pasol, did not have the burden of proof, we consider and weigh all 

the evidence and set aside the verdict only if the evidence that supports the jury finding 

is so weak as to make the verdict clearly wrong and manifestly unjust. Id. at 329 (citing 

Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986)). We must examine both the evidence 

supporting and that contrary to the judgment. Id. The jury is the sole judge of the 

credibility of the witnesses and the weight to be given to their testimony. Yeng v. Zou, 

407 S.W.3d 485, 489 (Tex. App.—Houston [14th Dist.] 2013, pet. denied). We may not 

substitute our own judgment for that of the jury, even if we would reach a different answer 

on the evidence. Id. The amount of evidence necessary to affirm a judgment is far less 

than that necessary to reverse a judgment. Id. 

B. Applicable Law and Discussion

Pasol challenges four different claims raised in the jury charge: common law 

fraud, statutory fraud, negligent misrepresentation, and promissory estoppel.

“[I]t is the court’s charge, not some other unidentified law, that measures the 

sufficiency of the evidence when the opposing party fails to object to the charge.” 

Osterberg v. Peca, 12 S.W.3d 31, 55 (Tex. 2000). The jury charge stated that common 
8

law fraud:

occurs when (a) a party makes a material misrepresentation, (b) the 

misrepresentation is made with knowledge of its falsity or made recklessly 

without any knowledge of the truth and as a positive assertion, (c) the 

misrepresentation is made with the intention that it should be acted on by 

the other party, and (d) the other party acts in reliance on the 

misrepresentation and thereby suffers injury.

Common Law Fraud may also occur if a party conceals or fails to disclose 

material facts of which they have knowledge but the other party does not, 

resulting in injury or financial detriment to the other party because of the 

concealment.

The Texas Supreme Court has recognized that a “fraud claim can be based on a 

promise made with no intention of performing, irrespective of whether the promise is later 

subsumed within a contract.” Formosa Plastics Corp. USA v. Presidio Eng’rs & 

Contractors, Inc., 960 S.W.2d 41, 46 (Tex. 1998). “A promise of future performance 

constitutes an actionable misrepresentation if the promise was made with no intention of 

performing at the time it was made.” Id. at 48. Here, Ayala was required to present 

evidence that Pasol made representations with the intent to deceive and with no intention 

of performing as represented. Id. The evidence presented must be relevant to Pasol’s 

intent at the time the representation was made. Id.

The jury heard testimony from Ayala, who testified that that he and Pasol met at 

Pasol’s office multiple times before and after the property was purchased. Ayala 

explained that Pasol stated the property was a working flea market, with the proper 

certificates from the county to be operational. According to Ayala, those assurances are 

what convinced Ayala to enter into the original contract to purchase the property. 

However, once Ayala became aware that the property was not operational as promised, 
9

he testified he went back to speak with Pasol. Ayala stated that the nature of the 

conversation led him to believe that they would resolve the issue of expenses once the 

project was complete. Ayala believed that Pasol would either reimburse the money 

Ayala spent fixing the property so that a certificate of occupancy could be issued or credit 

the amount of money Ayala spent improving the property towards Ayala’s pending 

mortgage loan. Although Pasol disputed those conversations ever took place, the jury 

was free to find that Ayala’s testimony regarding Pasol’s promise to resolve the monetary 

issues between Pasol and Ayala fit all the elements of common law fraud as stated in the 

jury charge. 

Considering the evidence in the light most favorable to the challenged finding, we 

conclude the trial evidence would enable reasonable and fair-minded people to find that 

Pasol made a material misrepresentation with the intention to cause Ayala to rely on it

when he told him to continue with the property improvements. See City of Keller, 168 

S.W.3d at 823, 827; Yeng, 407 S.W.3d at 493; Energy Maint. Servs. Grp. I, LLC v. Sandt,

401 S.W.3d 204, 211–15 (Tex. App.—Houston [14th Dist.] 2012, pet. denied). 

Examining the entire record, considering both the evidence in favor of, and contrary to, 

the challenged finding, and considering and weighing all the evidence, we conclude that 

the jury’s finding that Pasol made a material misrepresentation with the intention of 

Ayala’s reliance is not so contrary to the overwhelming weight of the evidence as to be 

clearly wrong and unjust. See Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 406–

07 (Tex. 1998); Energy Maint. Servs. Grp. I, LLC, 401 S.W.3d at 211–16. Therefore, the 

evidence is legally and factually sufficient to support this jury finding.
10

Because the jury’s finding of common law fraud would support the entire damages 

award, we do not need to address the additional findings made by the jury. See TEX. R.

APP. P. 47.1. We overrule Pasol’s third issue. 

III. STATUTE OF FRAUDS AND PAROL EVIDENCE RULE

By his first issue, Pasol argues that the statute of frauds precludes the 

enforceability of an oral promise or agreement relating to the sale of real estate; that Ayala 

failed to show partial performance as an exception to the statute of frauds; and that Ayala 

is barred from relying on testimony and other extrinsic evidence to enforce an alleged oral 

agreement. By his second issue, Pasol argues that Ayala misapplied the fraud exception 

to the parol evidence rule.

Although Pasol alleges violations of the statute of frauds and parol evidence rule, 

Ayala’s live pleading does not raise any claims that are dependent on the existence of an 

enforceable contract. Instead, Ayala asserted that Pasol made fraudulent 

misrepresentations to him before and after the conveyance of the property which caused 

him to incur out-of-pocket expenses, and that formed the sole basis for his claim of 

damages. The statute of frauds may apply to non-contractual claims—for example, the 

Texas Supreme Court has held that “the Statute of Frauds bars a fraud claim to the extent 

the plaintiff seeks to recover as damages the benefit of a bargain that cannot otherwise 

be enforced because it fails to comply with the Statute of Frauds.” Haase v. Glazner, 62 

S.W.3d 795, 799 (Tex. 2001). But Ayala does not seek benefit-of-the-bargain damages 

in this case, nor does he complain that he was fraudulently induced into agreeing to the 

contract. See id. at 798 (noting that “a plaintiff cannot assert a fraudulent inducement 
11

claim when there is no contract”). Therefore, the statute of frauds does not apply to 

Ayala’s claim, which exclusively seeks out-of-pocket damages. See id. (holding that, to 

the extent the plaintiff sought benefit-of-the-bargain damages related to a contract that is 

unenforceable under the statute of frauds, the statute of frauds bars the fraud claim, “but 

[plaintiff’s] fraud claim for out-of-pocket damages, if any, may survive”); see also Wilhoite 

v. Sims, 401 S.W.3d 752, 759 (Tex. App.—Dallas 2013, no pet.) (holding that because 

the oral agreements were not “a contract for the sale of real estate,” the “agreements 

were not within the statute of frauds.”). Similarly, because the meaning of the agreement 

was not at issue, the parol evidence rule is not applicable. See David J. Sacks, P.C. v. 

Haden, 266 S.W.3d 447, 450 (Tex. 2008) (providing that, when a contract is 

unambiguous, parol evidence “will not be received for the purpose of creating an 

ambiguity or to give the contract a meaning different from that which its language 

imports”).

We conclude that the statute of frauds and parol evidence rule do not apply in this 

case. We overrule Pasol’s first and second issues.

IV. DAMAGES

By his fourth issue, Pasol claims Ayala is not entitled to recovery of damages 

because the evidence was insufficient to support the amount of the verdict.

Pasol argues that the amount of actual damages awarded by the jury was not 

proper because Ayala fails on his causes of action and the evidence was factually and 

legally insufficient. However, we have found that the evidence supporting the causes of 

action raised was factually and legally sufficient.
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Pasol also argues that the amount of $235,438 awarded by the jury was not 

supported by evidence. Ayala presented invoices from Zarsky Lumber, Godel 

Construction, G & T Paving, and Peralez Septic Tank Installation. All the invoices were 

to Ayala and stated they were paid in full. Pasol did not object to this evidence during 

trial. The jury also heard testimony from Roberto Gomez, owner of Godel Construction; 

Montemayor, Ayala’s engineer; and Raul Herrera, a laborer who worked on the project. 

Gomez testified that his bill had been paid on this project. Montemayor testified he was 

still pending payment from Ayala. Herrera testified about the wage he was paid and that 

there were other workers on the project who were paid in cash due to their status in the 

country. Pasol did not object to their testimony either. 

The jury heard testimony from these witnesses as to what the companies charged 

Ayala for their services. The jury also heard testimony from Ayala as to what he 

understood from Pasol’s statements to him and what expenses he incurred to make 

improvements to the property. The damages found by the jury were supported by the 

evidence.4 We overrule Pasol’s fourth issue.

V. CONCLUSION

We affirm the judgment of the trial court. 

GINA M. BENAVIDES,

Justice

Delivered and filed the

4th day of April, 2019.

 

4

 In his fifth issue, Pasol argues that the jury question regarding quantum meruit was improperly 

submitted to the jury. Pasol objected at trial and on appeal, Ayala waives any claim under the theory of 

quantum meruit. Therefore, we do not need to address this issue. See TEX. R. APP. P. 47.1.